I have exactly the same issue with my 1200 unit... Now I wish I had ordered the 'older' 720 or 800 version, which are just as good. I'm even considering buying such one, just for this only reason. I'm using Youtube alot and the buttons to make a video go fullscreen or the 'x' to close a window, are VERY small and often a pain to hit correctly. I tried your solution of altering the width to 800 and it clearly made the buttons bigger and far better to press, but it just downgrades your superior 1200 unit to an older model, which is not why I bought it. Also, some apps, as you mentioned, are clearly not made for lower screen widths than 1200.
I hope there will be a solution for this issue in an upcoming update.
I hope there will be a solution for this issue in an upcoming update.